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09 August 2018 / news

Prevent disputes with pension providers about the implementation agreement

The Dutch pensions system has been under increasing stress since 2008.

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A sudden downturn on the financial markets and market interest rates held down artificially, together with rising life expectancy and strict solvency requirements, have produced some unpleasant financial surprises. So the question as to who is responsible or liable for the solvency shortfalls is a logical one. In our practice we are seeing an increasing number of discussions between employers and pension providers on the contents of or changes to the administration agreement. The disadvantage of sectoral pension funds is also a risk from an insurance point of view.

The discussions arises precisely because finding straightforward answers in the implementation agreement is too often difficult. Establishing the conditions under which the employees' collective pension schemes are administered is a highly complex task, due to both the financial and the legal aspects involved. Furthermore it’s look like unforeseen circumstances will always appear and the interests are astronomical and can quickly and greatly exceed the company's balance sheet. It is absolutely necessary to have a good understanding of the tariff bases and the investment policy with its associated risk profiles. Establishing the rights and obligations as well as amendment or termination conditions is an exacting task that demands a thorough knowledge of the mandatory or supplementary rules of the Pensions Act or subordinate legislation, including the policy of the regulatory authorities.  Knowledge of the procedural risks in legal proceedings is a skill that must not be underestimated.

Therefore entering into a implementation agreement must start with the following questions:

  1. Are the conditions perfectly clear and coherent and in accordance with the pension agreement?
  2. Is there a risk for a far-reaching imbalance between rights and obligations (because of unforeseen circumstances)?
  3. Are the conditions for terminating the contract reasonable?
  4. Does the contract fulfil all the statutory regulations of the Dutch Pension law?   

Our team will be pleased to assist you in all these complex pension issues. The team comprises lawyers, tax experts and civil-law notaries who have a thorough knowledge of all the relevant laws and regulations. Naturally we work closely with our clients' own actuaries or those within our own network.


Please consult your regular Loyens & Loeff adviser or our pension team (Robin van der Ham, Laurie Kuijpers and Bas Dieleman).

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